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Bed Bath & Beyond renews bankruptcy talks as efforts to raise cash fails

The filing could come before an April 26 deadline by which the company sought to raise another $300 million from equity investors, the people said

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Photo: Bloomberg

Bloomberg

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By Rachel Butt, Eliza Ronalds-Hannon and Lauren Coleman-Lochner
 
Bed Bath & Beyond Inc. is once again laying the groundwork for a bankruptcy filing as its last-ditch efforts to raise cash come up short. 
 
The retailer is holding talks with advisers and lenders ahead of a Chapter 11 filing that could come in the next few weeks, according to people with knowledge of the conversations, who asked not to be named discussing private plans. Bed Bath & Beyond is also looking at financing options to help fund itself during bankruptcy, the people added. 

The filing could come before an April 26 deadline by which the company sought to raise another $300 million from equity investors, the people said, adding that a decision isn’t final and plans could change. 

Bed Bath & Beyond has shocked investors before: earlier this year, the company staved off a bankruptcy filing after raising $360 million from a hedge fund investor that bought shares at a discount.

A representative for Bed Bath & Beyond didn’t respond to requests for comment. 

The retailer has been shuttering hundreds of stores across the US, running big sales to clear out merchandise and laying off thousands of employees. It has said it’s on pace to have 360 Bed Bath & Beyond stores by the end of April and 120 Buybuy Baby shops. 

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Even as the retailer prepares for bankruptcy, shares staged another rally in a move reminiscent of meme-stock mania two years ago, where wild swings in stocks became commonplace. Bed Bath & Beyond spiked 41% in the first 40 minutes of trading on Wednesday, bringing the stock price to nearly 49 cents, more than double its closing price last week.

The surge comes as trading volume explodes. More than 900 million shares have been traded this week, already more than four-times the weekly average of shares to change hands over the past year. The raucous rally drew retail traders to discuss the stock on platforms such as Reddit’s WallStreetBets, where chatter had been relatively dormant for the past two months.

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First Published: Apr 19 2023 | 11:23 PM IST

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